The marketing mix strategies to be used - Marketing Management

Although there are differences in detail, management of the marketing mix elements in international marketing involves the same ‘ingredients’, i.e. the basic 4Ps or 7Ps in the case of services, and the same general principles for their management as in domestic markets. There are some differences, for example, the ‘place’ element of the marketing mix for international markets is more likely to include more specialized intermediaries in the channels of distribution such as agents or overseas distributors. Similarly, logistics, because of sheer distance, is likely to be more complex to plan. In the area of pricing, the marketing manager has to consider exchange rates when quoting prices and matters such as currency regulations and provision for export credit guarantees. Nonetheless, despite these and other added considerations and complexities when marketing abroad, as already mentioned the basic concepts and techniques for managing the marketing mix remain the same. However, there is one major aspect of managing marketing mix elements in international marketing which broadly is not an issue when marketing on a solely domestic basis.

This aspect, which is central to managing the marketing mix in international marketing, concerns the extent to which the elements of the marketing mix, and indeed the marketing mix as an overall package, need to be modified or adapted to each of the foreign markets in which a company is involved. On the other hand, it can be applied in a standardized manner across all the markets in which the company operates. This is an issue of ‘standardization’ and can often be the major issue when considering managing the marketing mix in international markets. We therefore concentrate in our discussion on the management of the international marketing mix on this area.

When a company operates in one or more international markets a decision must be made as to the extent to which it is appropriate and/or possible to use a standardized versus a non-standardized approach to its marketing mix in these markets. Keegan6 proposed five strategies for international marketing. Examples of strategies and products and services that fall under each of the above categories are:

  1. straight extension e.g. famous cola brands;
  2. product adaptation e.g. famous petrol brands using international logos and advertising themes, but adapted in terms of the product being slightly different for different climatic conditions;
  3. communications adaptation e.g. bicycles promoted as a leisure item in advanced economies, but as a prime means of transport in less well developed countries;
  4. dual adaptation e.g. clothing where fashion might be the principal motivator in some countries, but in others it might be functionality;

Strategy Promotion Product

  1. Same Same
  2. Same Different
  3. Different Same
  4. Different Different
  5. (Re)invention

Keegan’s five strategies for international marketing

Keegan’s five strategies for international marketing

5 product invention or re-invention to meet customer needs at affordable prices a standard item might have to be simplified e.g. a hand-cranked washing machine or sewing machine.

It is appropriate here to use Buzzell’s7 interpretation to define the meaning of standardization and nonstandardization in international markets:

In a literal sense, multinational standardization would mean the offering of identical product lines, at identical prices, through identical distribution systems, supported by identical promotional programmes, in several different countries. At the other extreme, completely and ‘localized’ marketing strategies would contain no common elements whosoever. It is not always an either/or decision to standardize or not. Very often it is a question of deciding the degree of standardization for the mix as a whole and for each of the individual elements of the mix in particular.

On the one hand supporters of standardization argue that for any given product consumers’ interests everywhere are basically the same and therefore standardization is possible. Increasingly the world is becoming a global marketplace where, mainly because of improvements in communication and transportation, there has been a trend towards a more homogeneous world market. The marketing manager must determine the appropriate level of standardization given the particular circumstances and the nature of the markets for his or her company. The potential benefits of standardization are:

  1. Cost savings: With standardization a company can achieve larger production runs, spread the cost of marketing and research and development and thus reduce total unit costs.
  2. A uniform global image: Standardization enables the development of a uniform image throughout the world, a consistency in product design, brand name and packaging, in sales and customer service and generally in the image projected to customers which can become a powerful competitive weapon.
  3. Improved planning and control: A strategy of global standardization helps facilitate improved planning and control within a company. If all major decisions are made at company headquarters and implemented throughout all worldwide divisions and subsidiaries there is less potential for conflicting policies being pursued.

Despite the potential advantages to be gained from a standardized marketing mix, there are several factors which render this strategy less suitable and on occasions may make it impossible to standardize certain elements of the mix. For example, there may be legal restrictions which prevent standardizing elements of the marketing mix. Similarly, geographical or climatic conditions may prevent standardization. Economic factors, such as standards of living and disposable income may make it less effective to standardize marketing mix elements. Cultural factors may make standardization difficult.

The extent of standardization can only be determined for each particular company at a particular point in time in its overall strategic planning, but it is one of the key decisions regarding the management of the marketing mix elements in international marketing. Even a company like McDonald’s, who have standardized as much of their international marketing as possible, have to vary the marketing mix to meet local needs. For example, there is a non-beef product for the Hindu segment of the Indian market. Their New York outlets cater for lunch-time workers whereas in Holland they are geared up to family groups. In parts of the Far East they cater for the needs of the teenage market, and in the UK they are strongly positioned in the children’s birthday party segment.

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